These amendments have now been agreed with the following key terms:
- Deferral of the delivery of five newbuild jack-up rigs until mid-2022, representing estimated liquidity improvement of approximately US$190 million until 1Q22.
- Deferral of certain interest payments until 2022, representing an estimated liquidity improvement of approximately US$60 million.
- Deferral of debt amortisation in 2021 of US$65 million until maturity of the loans in 2Q22.
- Amendment of certain of the financial covenants, including: - Reduction of the minimum liquidity covenant from 3% of net interest bearing debt, to US$5 million with a gradual step-up to US$20 million at 31 December 2021, which gives a liquidity improvement of up to US$40 million in the period. Thereafter the 3% level will be reinstated. As part of the amendments, utilisation of the remaining US$30 million under our revolving credit facilities require all banks’ consent.
- Amending the minimum book equity ratio from 33.3% to 25% up to and including 31 December 2021. Thereafter the required ratio will be 40%.
- Suspension of the Debt Service Coverage Ratio covenant of 1.25x until 31 December 2021.
- Waivers of certain covenants in our ring-fenced financing structure including incremental liquidity from restricted cash.
The amendments provide for payment of certain interest payments originally due at the end of the first quarter of 2020 which had been deferred with lender consent, as well as other amendments to the facilities.
“We are extremely pleased with the support given to the company by all stakeholders. The amended financing package gives a required cash break-even bareboat contribution in 2021 at only around US$20 000/day per rig based on just 12 rigs in operation. In addition, the company has six more rigs activated and available, which it only intends to bring back to work on cashflow accretive contracts. We are also encouraged by the already improving supply-demand outlook for oil, and optimistic that this will lead to a gradual improvement in jack-up drilling activity in the coming year. We furthermore continue to look at additional initiatives to improve liquidity”, said Chairman Paal Kibsgaard.
The agreements are conditional on the issuance of 46 153 846 new shares to the subscribers of the US$30 million equity offering, which is expected to be settled 5 June 2020.
Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/05062020/borr-drilling-completes-financial-restructuring/